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UK House Prices to Stabilise in H2 2021?

The average price of a home in the UK rose 10 per cent between May 2020 and May 2021, according to the latest data from the Office for National Statistics (ONS).

The figures, released yesterday, showed a slightly increase from the period between April 2020 and April 2021, when house prices went up 9.6 per cent. According to the ONS, the average home in the UK increased 0.9 per cent in May 2021 to reach £255,000. This is £1,000 below the high of March 2021.

Strangely enough, the region with the lowest annual growth was London, where house prices rose just 5.2 per cent between May 2020 and May 2021.

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There was no shortage of industry comment, much of it agreeing that the escalation in prices is due to slow over the second half of 2021.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “In May, double-digit house price rises hit the dizzying heights we last saw just before the onset of the financial crisis, but this could be as good as it gets for a while. We’re not expecting precipitous falls, but rises are unlikely to be as steep in the coming months. While homeowners may miss the boost to their wealth, it could be a blessed relief for buyers.”

Coles said that the figures for May reflected the ending of the Stamp Duty holiday. “Sentiment takes a while to feed into these figures,” she said, “because the gap between the initial enthusiasm of a house buyer and final exchange is a soul-destroying period of around three months. It means many of the property sales completing by the end of May are likely to have been agreed at the start of March – when Rishi Sunak confirmed the stamp duty extension in the Budget.”

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Others were more critical. Karen Noye, mortgage expert at Quilter, said that house prices were ‘completely detached’ from current circumstances.

She added that the economy is coming to a crossroads. “Many businesses will be buoyed,” she said, “by the prospect of the biggest opening since March 2020 on the horizon but simultaneously worried about having to cope with the furlough scheme being rescinded. With the stamp duty taper about to fully go in a matter of weeks the run of house price increases may be soon about to falter.”

BY PETE CARVILL

Source: Property Wire

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UK house prices slip by 0.5% as ‘peak buyer demand likely to have passed’

The average UK house prices slipped by 0.5% in June as the full stamp duty holiday came to an end, according to an index.

It marked the first monthly fall since January, indicating that the peak of buyer demand is now likely to have passed, according to the research from Halifax

But typical property values were still more than £21,000 higher than a year earlier, the bank said.

The price drop in June meant annual house price inflation eased back slightly from May’s 14-year high of 9.6% to 8.8%.

Across the UK, the average house price in June was £260,358.

The stamp duty holiday in England and Northern Ireland is now being tapered, before being phased out completely in the autumn.

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The “nil rate” stamp duty band shrank from £500,000 to £250,000 from July 1, prompting a rush of buyers trying to beat the deadline, and it will revert to its normal level of £125,000 from October 1.

Russell Galley, managing director, Halifax said: “With the stamp duty holiday now being phased out, it was predicted the market might start to lose some steam entering the latter half of the year, and it’s unlikely that those with mortgages approved in the early months of summer expected to benefit from the maximum tax break, given the time needed to complete transactions.

“That said, with the tapered approach, those purchasing at the current average price of £260,358 would still only pay about £500 in stamp duty at today’s rates, increasing to around £3,000 when things return to normal from the start of October.

“Government support measures over the last year have helped to boost demand, particularly amongst buyers searching for larger family homes at the upper end of the market.

“Indeed, the average price of a detached home has risen faster than any other property type over the past 12 months, up by more than 10% or almost £47,000 in cash terms.

“At a cost of over half a million pounds, they are now £200,000 more expensive than the typical semi-detached house.

“That power of home-movers to drive the market, as people look to find properties with more space, spurred on by increased time spent at home during the pandemic, won’t fade entirely as the economy recovers.

“Coupled with buyers chasing the relatively small number of available properties, and continued low borrowing rates, it’s a trend which can sustain high average prices for some time to come.”

Looking across the UK, Halifax said Wales (12.0%) continues to lead the way for annual house price growth, registering its strongest performance since April 2005.

Northern Ireland (11.5%), the North West (11.5%), Yorkshire and Humberside (10.9%) and Scotland (10.4%) also registered double-digit gains.

For Northern Ireland and Scotland, the annual price rises were the highest recorded since late 2007, while for the North West and Yorkshire, price inflation was the strongest since early 2005, the report said.

At the other end of the scale, the South of England continues to lag somewhat, with eastern England and the South East recording price inflation rates of around 7%, Halifax said.

In London, property values were up by just 2.9% year on year, with several unique factors weighing on the market there, the report added.

Mr Gardner said of UK house prices generally: “We would still expect annual growth to have slowed somewhat more by the end of the year, with unemployment expected to edge higher as job support measures unwind, and the peak of buyer demand now likely to have passed.”

Tomer Aboody, director of property lender MT Finance, said: “Even though property price increases in London have been less stellar than elsewhere, prices are still at their highest in the capital and continue to rise, putting property ownership further beyond the reach of first-time buyers in particular.”

Anna Clare Harper, chief executive of property consultancy SPI Capital, said: “The tapering down of the temporary stamp duty reduction takes the pressure off demand.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

“However, supply is still constrained, construction is getting harder and more expensive, and a mass sell-off from property owners is unlikely in the absence of significant interest rate rises.”

Mark Harris chief executive of mortgage broker SPF Private Clients, said: “Cheap borrowing and affordability will continue to give buyers more purchase power, and result in continued demand, even if the peak of the market has passed.”

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics) said: “We don’t expect this new balance between supply and demand to change much over the next few months, particularly if economic growth can make up for the ending of the furlough scheme.”

Here are average house prices and the annual increase across the UK, according to Halifax:

– East Midlands, £214,542, 8.6%

– Eastern England, £303,834, 7.6%

– London, £511,234, 2.9%

– North East, £152,989, 9.2%

– North West, £201,836, 11.5%

– Northern Ireland, £163,484, 11.5%

– Scotland, £183,359, 10.4%

– South East, £353,618, 7.3%

– South West, £269,142, 9.8%

– Wales, £192,507, 12.0%

– West Midlands, £221,661, 8.1%

– Yorkshire and Humber, £185,229, 10.9%

By Vicky Shaw

Source: Independent

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Pandemic boom drives UK house prices up by most since 2004

UK house prices jumped by the most in more than 16 years this month, soaring by 13.4% from June 2020, and demand is expected to stay strong while a coronavirus emergency tax break remains in place, mortgage lender Nationwide said.

In monthly terms, house prices were 0.7% higher than in May as buyers rushed to take advantage of the tax incentive and sought bigger homes after their experiences of lockdown.

“While the strength is partly due to base effects, with June last year unusually weak due to the first lockdown, the market continues to show significant momentum,” Nationwide’s chief economist Robert Gardner said on Tuesday.

Economists polled by Reuters had expected prices to rise by 13.7% in annual terms and by 0.7% from May.

The tax break, introduced last year as part of British finance minister Rishi Sunak’s emergency support for the economy, had originally been due to expire at the end of March.

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But the first 500,000 pounds ($693,250) of any property purchase in England or Northern Ireland are now due to remain exempt until the end of June, and a 250,000 pound tax-free allowance will run until the end of September.

“Underlying demand is likely to remain solid in the near term as the economy unlocks,” Gardner said.

“Consumer confidence has rebounded while borrowing costs remain low. This, combined with a lack of supply on the market, suggests further upward pressure on prices. But as we look toward the end of the year, the outlook is harder to foresee.”

THE BOE IS WATCHING

As well as the tax break, Sunak’s huge jobs support programme is also due to be phased out by the end of September, raising fears of an increase in unemployment.

Nationwide said it was still possible that the shift in demand for larger properties seen during the pandemic would continue to help the market once the tax break is gone.

The lender published a survey last month showing that almost seven in 10 homeowners who were considering a move would be doing it even without the extension of the tax incentive.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Nationwide said house prices were close to a record high relative to incomes, making it harder for first-time buyers to raise a deposit. But mortgage payments were not high as a proportion of pay, due mostly to low mortgage rates.

The Bank of England has said is monitoring the housing market as it weighs up the chances of a broader pick-up in inflation as the economy reopens. read more

Last week, the central bank left its key interest rate at an all-time low or 0.1% and made no change to its plan to increase its government bond purchases to 895 billion pounds.

Despite the signs of recovery in Britain’s economy, most BoE rate-setters said they wanted to “lean strongly against downside risks to the outlook”.

Nationwide said house prices in London rose at the slowest rate of any region in England during the second quarter of 2021 but they still increased by 7.3%. Northern Ireland was the strongest performing region, with prices up 14% year-on-year.

Writing by William Schomberg

Source: UK Reuters

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UK house prices rose at their fastest rate since 2004

UK house prices rose at their fastest rate since 2004 in June as buyers competed fiercely in a market rebounding from Covid-19 lockdowns, Nationwide said.

The average price of a property in the UK rose 13.4% in June from a year earlier to a record £242,709, Britain’s biggest building society said. In the quarter to the end of June prices rose 10.3%, up from 6.3% in the first quarter of 2021.

June’s rate of growth was boosted by the shutdown of the property market a year earlier during the first Covid-19 lockdown but prices also rose sharply because of a buying frenzy.

Households are rethinking their property needs in light of the crisis, heading for the suburbs and coastal towns for more space and cheaper prices. The market has also been charged up by Chancellor Rishi Sunak’s stamp duty holiday, whose full effect ends on 30 June with some benefits lasting until October.

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David Westgate, chief executive of property consultants Andrews Property, said: “It’s starting to feel like prices are freewheeling with buyers snapping up properties, particularly those with generous outside space, as soon as they come on to the market. The end of the full stamp duty holiday tomorrow may see activity cool a little but not significantly, as there are plenty of buyers who still have time and the motivation to complete before the tapered relief ends on 30 September.”

Prices rose in all parts of the UK, led by Northern Ireland where houses sold for 14% more than a year earlier. Wales was the next strongest region. In Scotland, where the stamp duty holiday ended in March, prices rose at an annual rate of 7.1% – the weakest in the UK.

In 2004, when prices were rising at a similar rate, the housing market was recovering from the Iraq war and heading for the financial crisis that caused Northern Rock to implode.

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Nationwide’s chief economist, Robert Gardner, said demand was likely to remain solid for a while with prices likely to rise further as the economy rebounds amid rising consumer confidence and low interest rates. But he said the outlook was hard to predict with the government set to reduce support for households and businesses but with many people still looking for more space.

“Underlying demand is likely to soften around the turn of the year if unemployment rises as most analysts expect, as government support schemes wind down,” Gardner said. “But even this is far from assured. Even if the labour market does weaken, there is also scope for shifts in housing preferences as a result of the pandemic to continue to support activity for some time yet.”

By Sean Farrell

Source: ShareCast News

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ONS: UK house prices rose by 10.2% in the year

UK average house prices rose by 10.2% in the year to March 2021, the highest annual growth rate seen since August 2007, according to the ONS House Price Index.

This is up from the 9.2% increase seen in the year to February 2021.

Average house prices rose by the greatest margin in Wales, up 11% to £185,000, followed by a 10.6% uplift in Scotland to £167,000.

England noted a 10.2% increase to £275,000 and average UK house prices rose by 6% to £149,000 in Northern Ireland.

London continues to be the region with the lowest annual growth (3.7%) for the fourth consecutive month.

Miles Robinson, head of mortgages at Trussle, said: “We’re continuing to see house prices grow month-on-month, suggesting that the market remains buoyant and demand is high as a result of the stamp duty holiday.

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“With this in mind, it’s important for buyers in the home buying process to be aware that the increased demand has caused inflated prices.

“First-time buyers are now paying up to £73,000 more than last year to get on to the property ladder.

“This has also caused delays in completion times and it now takes up to 171 days to purchase a property in the UK.”

Cloe Atkinson, managing director of Mortgage Engine, added: “A year ago, activity in the property market remained almost entirely suspended as the UK continued to endure its first lockdown.

“In contrast, 2021 has so far proved a stellar year for house price growth. The busy start to this year reflects the success of various government measures to stimulate demand in the market, as well as the hard work carried out by the property industry to overcome the challenges of the pandemic and adapt to new ways of doing business.

“The mortgage industry has adopted new technology at an unprecedented rate, increasing efficiency and unlocking new ways of working.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

“As the UK cautiously moves to relax its pandemic restrictions, its vital that the property sector doesn’t leave behind the spirit of innovation that’s carried it through the last year.

“Now is the time for the industry to increase its investment in tech and continue to evolve to meet the challenges of the post-pandemic period.”

Martin Stewart, director of London Money, added: “Even though the mania around the stamp duty holiday has waned, we are entrenched in a market with too many buyers chasing too few properties.

“We have witnessed a lot more chains falling down recently, maybe because buyers have offered on multiple properties in order to secure something, anything.

“We have also detected a significant stretching of the truth from prospective buyers whose stories about being “a cash buyer” or “chain-free” collapse quicker than a Jenga tower.”

By Jake Carter

Source: Mortgage Introducer

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UK House Prices are Being Driven by Increasing Demand

A dearth of supply abutting steady demand has caused UK House Prices to rise sharply, says the Royal Institution of Chartered Surveyors in its latest UK Residential Market Survey.

The survey found that buyer demand had remained steady and consistent across the UK, but that the number of fresh listings was ‘insufficient’.

Furthermore, the authors write, “The survey’s headline measure of house price growth rose again over the month, with a net balance of +75 per cent of respondents noting an increase in prices during April. This is up from a reading of +62 per cent back in March and has now become successively more elevated in each of the last three reports. Furthermore, all UK regions/countries are now seeing a sharp pick-up in house price inflation.”

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There was much commentary across the industry on the report. Tahir Farooqui, CEO of Canopy, said: “There’s a risk that the property market is being artificially propped up by measures like the stamp duty holiday. While higher-earners and second steppers have got to swoop in on the buying frenzy and make the most of cut costs, sky-high house prices are making homeownership even further out of reach for hopeful first-time buyers. When the dust settles and the support schemes are taken away, securing an affordable mortgage will remain a pipedream for many.”

Farooqui said that there should be support for those trying to move from renting a property to buying one. One measure, he said, would be to make rent payments count towards a credit rating to help first-time buyers when it came time to purchase a property.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Others pointed to the stamp duty extension as being the catalyst for the current bullish market. Rich Horner, head of individual protection at MetLife, said: “The fear of missing out has placed immense power in the hands of sellers, with many listings being sold at inflated prices that would have been inconceivable a year ago. But the market knows that this level of activity and house price growth is not sustainable, it’s a question of when prices stabilise rather than if.”

A more-pessimistic view was held by others. Ross Counsell, chartered surveyor and director at GoodMove, said: “What does this mean for the rest of 2021? Over the coming months, we expect that as we draw closer to the Stamp Duty Holiday deadline in June, demand will remain strong and there will be a rush of buyers hoping to complete a house sale before the deadline. This will ultimately cause an even bigger imbalance between supply and demand and as a result UK house prices will inflate even further.”

Counsell added: “Looking further into the year, post-Stamp Duty Holiday, we stand by our predictions that house prices will begin to fall although the more long-term impacts of the pandemic on the economy and how this will impact the housing market remain rather uncertain.”

BY PETE CARVILL

Source: Property Wire

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UK house prices hit new record high after growing at fastest rate in five years

UK house prices grew at the fastest pace in five years last month as the stamp duty holiday continued to buoy the market.

Average UK house prices in April reached a new record high of £258,204, an annual increase of 8.2 per cent and a monthly rise of 1.4 per cent.

Almost £20,000 has been added to the value of the average home since April last year, according to the latest Halifax House Price Index.

“The stamp duty holiday continues to add impetus to an extremely active market, magnifying the current shortage of available homes as buyers aim to take advantage of the Government scheme,” said Halifax managing director Russell Galley.

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“ The influence of the stamp duty holiday will fade gradually over the coming months as it’s tapered out but low stock levels, low interest rates and continued demand is likely to continue to underpin prices in the market.”

Boom in “full swing”

Laith Khalaf, financial analyst at AJ Bell, said: “The house price boom is still in full swing, as white line fever is pushing buyers into the market to take advantage of the recently extended stamp duty holiday.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

“Mortgage approvals have fallen back in recent months, which hints that some froth may be coming off the very top of the market. But we’re approaching the busy summer season, and there are plenty of tailwinds that will help to keep prices elevated moving forwards.

“The stamp duty holiday is gradually being tapered away by the end of September, but borrowing costs are still low, and the government continues to offer support in the form of Help to Buy and the Mortgage Guarantee Scheme. We also know that plenty of consumers have built up a war chest over the pandemic which can help them trade up the property market, perhaps to get some extra space for a home office.”

By Jessica Clark

Source: City AM

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The house price boom is all about what people can afford to pay

In mid-2020, the Office for Budget Responsibility was getting nervous about UK house prices. It was forecasting that they would fall into the end of 2020 and then fall some more, to end 2021 down by 11% on the year. They weren’t alone in their pessimism (or maybe optimism – how you see this depends on whether you are a buyer or a seller). At the same time, the Centre for Economics and Business Research was forecasting a 14% fall.

They were all completely wrong. In April, the Nationwide House Price index showed prices jumping 2.1% in April alone (a 17-year high) and 7.1% over the year. The average house price is now at a record high (£238,831). Transactions are on fire: in March there were more sales than in any month since records began in 2005, with mortgage approvals running 13% higher than they were pre-pandemic in February 2020. Ask any estate agent and you’ll hear endless anecdotal evidence of a frenzied boom: more buyers registered with each estate agent than ever; viewings limited to 15 minutes; houses selling in days; first bids coming in 20% above the asking price.

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So what has happened to make so many respected forecasters so spectacularly wrong? It is the usual story: fast rising demand hits limited supply. This is partly about the extension of the stamp duty holiday. This now runs until the end of June, so the race is on to buy. That has “lit a fire under buyers” already feeling some urgency to reset their lives post-pandemic, as Hargreaves Lansdown points out.

But this isn’t just about what people want (home offices, more rooms all round and outside space), it’s about what they can afford to pay. Right now they can afford to pay a lot more than a few years ago. That is partly about having hard cash for deposits. Since March last year, the UK population has added over £200bn to their savings accounts, with another £16.2bn deposited this March alone (the pre-pandemic average per month was £4bn-£5bn).

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

It’s also about mortgage rates being very low (under 2% on average). The house price to earnings ratio might be at an all-time high – and it is true that the last time they hit these sorts of levels (2007) they fell 20% soon after – but take out an 80% mortgage on the average house in the UK today and it will cost you around 36% of the median income, says Capital Economics. The average since the 1970s? Around 43% – with nasty peaks in 1989 and 2007 at over 60%. Houses may look very expensive, but on a monthly payment basis, they cost an awful lot less than before (in 2007 average mortgage rates were around 6%).

So what next? How long can the frenzy last? Demand may start to fall as the stamp duty holiday comes to an end (sales fell sharply after the 2008-2009 stamp duty holiday), an increase in supply appears and as lockdown fades (will we keep working from home?). But the real change will come if – when? – mortgage rates rise. They can’t fall much further – and so will soon have provided all the support they can to borrowers and hence to house prices.

We don’t expect rates to rise to keep up with inflation (they have to stay lower to erode our debt in real terms) but there will be an uptick at some point. That may not be enough to cause anything too nasty (certainly not in nominal terms) but it may mean that UK house prices next year aren’t much higher than they are this year.

By Merryn Somerset Webb

Source: Money Week

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House prices in the UK are still surging – here’s why it’ll probably continue

UK house prices (and those across the globe) appear to have done rather well during lockdown. Now that the economy is opening back up, can that continue? Unfortunately for anyone who wants to buy an affordable property in the near future, the answer appears to be “yes”.

There are an awful lot of house price indices in the UK, which is one reflection of how obsessed we are with them. The best-known ones are probably the Nationwide and Halifax indices. They’ve both been running for a long time and they both cover roughly the same stage of the process – they’re both based on data from approved mortgages. In other words, deals could still fall through but you’re far enough into the process that the price is pretty accurate, rather than aspirational.

Rightmove asking price data is also quoted widely. Clearly, this is based on listings for properties and therefore reflects seller aspirations rather than actual prices. There are lots of other indices too.

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But the official one comes from the Office for National Statistics. This one uses data from the Land Registry, so it comes from actual sales. The latest reading from February shows that UK house prices rose at an annual rate of 8.6% in February. That was the highest seen since October 2014, and considerably above the rate of inflation.

The death of the commute and the rise of the towns
We already know some of the factors driving this. As the ONS points out, “the pandemic may have caused house buyers to reassess their housing preferences.” Detached home prices rose by 9.1%, compared to 6.7% for flats – people want bigger spaces.

There is also a “death of the daily commute” trend still in effect here. This takes a number of forms. The obvious one is people moving out of big cities (mostly London) to take up more space in bucolic provincial towns (I note that The Telegraph has just put out a listicle of “21 fashionable ‘it’ towns that you can still afford to move to”).

Apparently the gap between the valuation of a central London property and a luxury country property is at its narrowest since 2010 (it’ll cost you 2.4 times as much to live in central London as in a country mansion, compared to three times in 2014).

Also note that on average, London prices rose by “just” 4.6%, by far the lowest of all English regions (the northwest of England saw prices rise by nearly 12%).

A slightly less obvious one is companies deciding to relocate outside of London (because the property – and staffing – is expensive) for premises in less expensive cities (Birmingham has been a big beneficiary – Goldman Sachs has decided to open a global software development site there, rather than Amsterdam or Paris, for example).

Much of this was already happening, but it’s only likely to be given an added impetus by the fact that the daily commute is no longer such an issue. That’s likely to last – it’s not clear how much commuting has changed yet (some companies are very keen to get everyone back in the office – others have already embraced the shift) but the average has almost certainly moved permanently.

Another obvious factor in the UK is the stamp-duty holiday. This is clearly bringing some demand forward and the extension announced in the spring Budget has kept the sugar rush going.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

It’s ultimately the same story as usual – cheap and cheaper money
However, some of it also just comes down to the same old point we’re always making: there’s a lot of money sloshing about it, and increasingly it’s making its way into property.

Here’s an interesting thing, for example: everyone has been focusing on the government’s latest scheme to prop up the market – taxpayer-backed 95% mortgages. But as property commentator Neal Hudson of BuiltPlace.com points out, Nationwide has just released its own “help out first-time buyers” scheme.

Nationwide – which, it’s worth noting, is typically a pretty cautious/responsible lender – is now offering first-time buyers the chance to borrow up to 5.5 times salary as long as they have a 10% deposit, and are taking out a five or ten-year fixed-rate mortgage. There will be £1bn-worth of the loans available.

One key aspect here is that Nationwide has clearly squared this with the regulatory regime. So that probably means that other banks will follow suit.

If we continue to see lending on mortgages becoming more easily available, then it’s very hard to see how UK house prices might fall. As always, the key indicator to watch here is credit availability and so far, that’s not getting tighter.

In the longer run, the ideal is that inflation starts to accelerate properly, so that you get wages rising faster than UK house prices. So house prices go down in “real” terms (ie after inflation). That means affordability improves.

It also means that in reality, the value of the house has gone down. However, it goes down in a less painful manner than if the actual price fell in nominal terms. Why? The key benefit is that you don’t get a disruptive correction.

The problem with house price crashes (and property crashes in general) is that banks lend lots of money to people to buy property. If prices crash, it means the collateral underpinning the loans is no longer as secure. That in turn makes banks more wary of lending money. So a house price crash is a deflationary event. In turn, that’s one reason why governments aren’t going to want one to happen.

What does this mean if you want to buy a house? Well, I’ve explained before that timing the market if you’re looking for a house to live in, is a self-destructive idea. Here’s what really matters. So don’t worry about that.

As I’ve said before, if you’re looking to rent or you’re already renting in London or big cities, that’s probably where your best value bets are. Don’t be shy to negotiate – renters don’t often have the upper hand so take advantage.

And if you’re thinking about investing… well, that’s a tough one. But for more on this, you should listen to Merryn’s latest podcast with Peter Spiller of Capital Gearing investment trust. They discuss financial repression and whether or not a more inflationary environment would mean that houses might be a good investment.

By John Stepek, Executive editor, MoneyWeek

Source: MoneyWeek

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UK house prices soared in February at the highest growth rate

UK house prices soared in February at the highest growth rate recorded in more than six years – but London lagged behind the rest of the country.

Average house prices across the UK increased 8.6 per cent in the year to February, up from eight per cent in January.

This is the highest house price growth recorded in the UK since October 2014.

The average UK house price was £250,000 this year, an increase of £20,000 compared to February last year, according to the latest figures from the Office for National Statistics.

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London recorded the worst annual growth, as average UK house prices in the capital grew 4.6 per cent, down from 5.7 per cent in January.

However, the average house price in London remained the most expensive of any region, rising to £496,000.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The housing market continued to be buoyant in February, with annual growth picking up.

“The launch of the mortgage guarantee scheme backed by the government will provide a further boost for the market, enabling those with modest deposits to get on the housing ladder sooner rather than later.

“However, while a growing number of lenders are offering 95 per cent mortgages, with pricing hovering around the 4 per cent mark, it is a classic case of the ‘haves and have nots’ as pricing on lower loan-to-value mortgages continues to edge downwards.”

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Nicky Stevenson, managing director at estate agent chain Fine & Country, said the property market remains “in a parallel universe at odds with the wider reality everyone has been living”.

“It’s been a gloom-defying 12 months given that last March, when the first lockdown arrived, the market seized up, mortgage products were withdrawn and everyone held their breath,” she said.

“Fast forward a year and you no longer need to be a mystic or expert to predict what comes next and that’s precisely the point. Confidence is king and there’s plenty of it out there. That would have remained true even if the stamp duty holiday had ended. Now that it hasn’t, that’s just more fuel on the fire but it’s impact has been overstated all along.”

By Jessica Clark

Source: City AM

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